1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
tester [92]
1 year ago
12

Suppose an unlevered firm issues $1000 in debt at a cost of debt of 10%. If the corporate tax rate is 20%, what is the change in

the firm's value?
Business
1 answer:
Strike441 [17]1 year ago
3 0

Suppose an unlevered firm issues $1000 in debt at a cost of debt of 10%. If the corporate tax rate is 20%, $200 t is the change in the firm's value.

Due to the issue of the corporate tax rate is entitled to Interest Tax Shield assuming Debt issued by the firm is perpetual and ignoring financial distress costs

Change in Value of firm

=Net Effect of Debt Financing

=Present Value of Interest Tax Shield (financial distress costs ignored)

= DebtValue * Cost of Debt * Tax Rate Interest Rate

= $1,000 * 10% * 20% 10%

=$200,

corporate tax rate, also known as corporate income tax or corporate tax, is a direct tax levied on the income or capital of a corporation or similar corporation. Many countries impose such taxes at the national level, and similar taxes may be levied at the state or local level.

Learn more about tax rate here: brainly.com/question/25791968

#SPJ4

You might be interested in
19th century how successful were labor organizations in improving the working conditions for, and advancing the interests of ind
Alex Ar [27]

Answer:

19th century,labor organizations were not very  successful in improving the working conditions and advancing the interest of industrial workers in united states.

<u>Explanation:</u>

Workers formed union.These unions give them immense power.These unions have a leader selected from among the workers only.Leader act as a representative of whole union.These unions can bargain on behalf of all the workers for providing them better working conditions,more wages,bonus.

They used strikes to force the employers to increase wages and provide better working conditions.These unions worked hard to stop child labor,give health benefits and help those workers who  got injured .In 19th century trade unions were formed by skilled workers.

Knights of labor was a  trade union formed in 1869.It attracted large number of workers and hoped to improve their working conditions.In 1880 skilled labor left Knight of labor and joined American federation of labor.It provides better working conditions.It had 500000 members by 1900.

Despite the efforts unions made less progress in this Era .

8 0
2 years ago
Oona wants to conduct research on personnel management, workplace environment, and what type of environment results in high leve
podryga [215]

Answer:

The answer is: industrial organizational psychology

Explanation:

Industrial organizational psychology studies individual employees and group dynamics in the workplace. It deals with problems that originate from different workplace situations (e.g. problems between employees or problems between management and employees) and proposes solutions to improve the well being of the people involved, increase their productivity and enhance the overall performance of the organization.  

4 0
3 years ago
Ten years ago, Stigler Company issued $100 par value preferred stock yielding 6%. The preferred stock is now selling for $102 pe
Alik [6]

Answer:

Current Yield = 0.05882 or 5.882% rounded off to 5.88%

Explanation:

A current yield refers to the annual return that a security provides based on the interest or dividend payments it makes expressed as a percentage of it current price. Thus, the current yield on preferred stock can be calculated as follow,

Current Yield - Preferred stock = Dividend per year / Current price

Dividend per year =  100 * 0.06 = $6 per year

Current Yield = 6 / 102

Current Yield = 0.05882 or 5.882% rounded off to 5.88%

4 0
3 years ago
The demand for emeralds tends to be very elastic. This is because emeralds are more of a _____________. It also means that a 33%
Natalka [10]

Answer:

C) luxury item, an increase

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price.

An elastic demand means a small change in price leads to a greater change in quantity demanded.

A luxury good is a good that isn't a necessity. They are usually bought as a status symbol.

Luxury goods usually have elastic demands.

Emeralds are luxury goods and if there's a fall in price of emeralds the quantity demanded of emeralds would rise.

I hope my answer helps you

8 0
2 years ago
Suppose the following information (in thousands of dollars) is available for H.J. Heinz Company—famous for ketchup and other fin
larisa [96]

Answer:

                         H. J. HEINZ COMPANY

                            Partial Balance Sheet

                   For the month ended April 30, 2017

Assets

<u>Current assets</u>

Cash                                                            $373,145

Accounts receivable                                  $1,171,797

Inventory                                                     $1,237,613

Prepaid insurance                                      <u>$125,765 </u>

Total current assets                                  <u> $2,908,320</u>  A

<u>Property, plant, and equipment</u>

Land                                                                          $76,193

Buildings                                        $4,033,369

Less: Accumulated depreciation <u>$2,131,260</u>         <u>$1,902,109</u>

                                                                                 <u>$1,978,302</u>  B

<u>Intangible assets</u>

Goodwill                                                                   $3,982,954

Trademarks                                                              <u>$757,907    </u>

                                                                                 <u>$4,740,861 </u>C

Total assets (A+B+C)                                                $9,627,483

6 0
2 years ago
Other questions:
  • What are three conditions for bacteria growth and reproduction ?
    15·2 answers
  • Is what we call the stock of goods that a business or store has on hand?
    12·1 answer
  • Find last​ year's salary​ if, after a 4% pay​ raise, this​ year's salary is $39,000.
    5·1 answer
  • In the context of the six sections of the Position Analysis Questionnaire (PAQ), _____ represent the reasoning, decision-making,
    9·1 answer
  • Hudek Inc., a manufacturing Corporation, has provided the following data for the month of July. The balance in the Work in Proce
    9·1 answer
  • Which of the following is a key characteristic of economic freedom?
    9·1 answer
  • Calculate, to the nearest cent, the future value FV (in dollars) of an investment of $10,000 at the stated interest rate after t
    11·1 answer
  • An experience that would be listed in the ""other experience"" category would include _____. a. military service b. awards earne
    11·1 answer
  • A postaudit is a valuable process because blank______. multiple choice question. it forces companies to fire employees who made
    13·1 answer
  • when the market rate is 8%, a company issues $50,000 of 9%, 10-year bonds and pay interest semiannually for a selling price of $
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!